tv Nightly Business Report PBS April 5, 2016 7:00pm-7:31pm PDT
this is "nightly business report" with tyler mathisen and sue herera. >> thrown into question, the government issues tough new task rules that threatens pzizer's tame off. for rent. why apartments may be cooling off. some odd ball deductions that could save you money. all that and more on "nightly business report" for tuesday, ap good evening. i'm sue herera. tyler mathisen with join us with a report from seattle in a few moments. we begin in washington where the government is getting tough on tax loopholes.
president obama is urging congress to take actions. sdplp i've been pushing for years to elimi some of the injustices in our tax system. i'm very pleased that the treasury department has taken new action to prevent more corporations for taking advantage of one of the most insidious tax loopholes out there and fleeing the country just to get out of paying their taxes. >> while congress has been slow to act, many see the treasure department's new rules as taking direct aim at pfizer's p aim. that send them tumbling more than 14% while pfizer shares rows. >> it was the third set of rules as urged by the treasury department to curb inversion.
many say this time they will succeed in stopping the biggest inversion deal of all. >> i'm leaning with the market which suggests the deal looks mostly done as in not going to happen. >> reporter: the deal was worth $160 billion when it was announced last november. that's a more stringent structure required by treasury rules to allow pfizer to invert. the new provisions would change that prompting many to assert treasury specifically targeted this deal. the rules are complicated but they come down to how big the foreign company is compared with the american company. the new guidelines would exclude acquisitions. this could mean two megadeals completed in 2014 and '15 wouldn't count. putting it back under the thresholds that would allow
pfizer to invert. >> it makes the action less valuable. i would expect they would walk away without the benefits of the tax minimumization strategy. >> reporter: in a joint statement they are reviewing the treasury's action. most analysts see bright prospects for both. pfizer could split itself into two smaller companies. allergan is close to closing its generic business. both are expected to remain buyers if they remain independent from others. president obama said today the only way to stop inversions completely is for congress to enact tax reform. lowering the corporate tax rate in the u.s. appears to be the only thing both sides agree on. one well known businessman made clear what he thinks about
so-called inversions and the corporate tax code. tyler mathisen spoke to him at an entrepreneurial conference in seattle. >> hi, sue. i've spent the day in seattle at the iconic conference, a celebration of entrepreneurship. we had one of the most famou voi voices here today. i asked him view about tax inversion. listen to what kevin o'leary had to say. >> our great companies like pfizer which have billions of dollars to bring back home to america can't do it. that's problem number one. number two is they're not competitive. they don't have the save income statement that all their competitors have. we're at a disadvantage. we can't spend as much because we're paying so much tax. the last administration was focused on the distribution of
health. the next administration, man or woman, must fix our corporate tax rates or we will fall to the wayside of competitors globally and pfizer is a case study. >> o'leary is not alone in believing it's imperative we fix or tax system. tyler mathisen, nbr, back to you. >> kevin is also a shareholder of pfizer stock. the president said tax avoidance is a strategy used worldwide and not just by americans. >> tax avoidance is a big global problem. it's not unique to other countries because, frankly, there are folks here in america who are taking advantage of the same stuff t.
a lot of it's legal but that's the same stuff. the laws are so poorly designed they have people with enough lawyers and enough accountants to wiggle out of responsibility that ordinary citizens are having to abide by. >> the president tied tax avoidance today to the panama papers. what's the connection there? >> the connection is the difference between the elites and the rest of us. that's the theme you're hearing playing out on the campaign trail in the donald trump campaign and the bernie sanders campaign. you're hearing this whole suspicion among american voters they elite get a better deal than the rest of us get. that's what the president was trying to tap into that wealthy people in corporations with better accountants and lawyers are out there playing by a different set of rules. that's politically powerful stuff. we'll see whether it works in this case.
>> we saw the first casualty of the panama matters. what do we know? >> a bizarre situation in iceland. we saw massive protests in that country that was so hard hit after the prime minister, his name and his wife's name showed up in these documents that were revealed over the weekend from a law firm in panama. the political pressure on the prime minister there was intense to step down. his deputy said he was going to step down. maybe a temporary basis. in the end it appears he has to come to the political pressure and will withdraw from that office. they may be the first of other presidents around the world who are impacted by this scandal. >> prime minister david cameron is also taking heat in his country. what did he say? >> he said he has no beneficial ownership. he doesn't have any shares. he's never used an offer shore account. the reason he was forced to
answer the question is because ove the weekend, his late father's name shows up as one of the people who owned one of those offshore accounts. cameron very clear saying he does not own any shares now. one of the questions will be did he ever. >> thank you very much. a rough session on wall street as stocks fell for a second straight day. the decline here followed a drop in markets overseas. by the finish the dow jones was offer more than 133 points to 17,603. the nasdaq declined 47 and the s&p 500 fell 20. hiring in the u.s. reached a nine-year high in february. the labor department reported that 5.4 million people found jobs that month. that's nearly a 6% increase from january and the most since 2006. more americans quit their job. the sign of a healthy labor
market and worker confidence. the services sector that accounts for about 80% of the economy picked up for the first time in months. the institute for supply management index rose in march from the prior month. the report eases some fears that slowdown over seas was spilling over here into the u.s. economy. the housing economy is starting to show some cracks. rents are still rising but not by as much. at a huge supply of new apartments coming to market nationwide has banks and developers nervous. >> reporter: at brand new cathedral common senses in washington, d.c., 94% of the 145 apartments are filled. high end buildings like this one are multiplying fast, and that is taking a toll on what have been red hot rising rent. annual rent growth in first quarter of this year was 4.5%. still strong but a significant
slow down from the 5% annual gains in the previous quarter. vacancies have been rising now for three straight quarters. >> banks are starting to pull back. i believe that banks are concerned as it relates to the amount of dollars they have out on multi-family properties. >> reporter: new construction during the first quarter was at the highest level since 1999. over the last 12 months just over 200,000 new units were completed, the highest year over year tally since 1998. that has banks that lend to this market worried. >> supply is really starting out strip demand. contrary to some of the conventional wisdom, there isn't this pool of demand because of the significant number of millennials. not that there aren't a lot of them but it's not infinite. supply of affordable renting
housing is still low. still some argue that the oversupply of luxury buildings like this one will fuel more affordable housing. >> the way you create c class properties is add new as and the as turned to bs and the bs turn to cs. you get new supplies of as that push everything down. >> reporter: that takes everything down. why the rent burden may ease, those struggling most will get no relief. for "nightly business report" in washington. cord cutting, declining cable viewership as if disney shareholders didn't have enough to worry about. now there's something else.
ford will invest more than one and a half billion dollars to build a new plant in mexico. the move will create more than 2800 jobs by the year 2020. the automaker says it remains kmitsed to adding jobs in the u.s. even as if expands south of the border. ford has been criticized by gop front-runner for its manufacturing operations outside the u.s. today trump called for its move a disgrace. the governor of mississippi has signed a controversial freedom bill into law. the governor signed the legislation despite opposition from gay rights groups and businesses that say it's discriminatory. they can deny sfervices to members of gay and lesbian. north carolina enacted a similar lay.
paypal says it's abandoning plans to expand into charlotte. that move would have added millions of dolrs to the local economy and create about 400 jobs. paypal says the new law perpetuates discrimination. from north carolina to ohio, where that state has seen its auto and steel industry slow. now the buckeye state is reinventing its economy shifting from manufacturing to a future in ecommerce. courtney reagan reports from troy township, ohio. >> reporter: part of the beauty of online shopping is the ability to shop when ever from where ever. there is a hub for retailers to locate ecommerce fulfillment center. >> for new development fulfillment centers, ohio is usually at the top of the list for retailers. if you're going to have one distribution center, they can
serve most of the nation from that area. >> reporter: home depot says this location allows it to deliver to 90% of its customers within two days. the choice to locate has added nearly 600 jobs to the area. home depot calls the labor force good. our clients have, who have a fulfillment or distribution presence in ohio have a more tenured or skill work force, and the way that manifests itself is the labor productivity. >> reporter: the growth rate for warehouse jobs as out paced total job growth since the great recession. in ohio, the industry contributed more than 3,000 j s jobs. the largest gain since 2007. the state colleges and universities are adding programs. some with help of grant money to keep the jobs here. >> we opened up our supply chain career development center.
it covers a variety of different training and educational opportunities. we offer training in truck certification, logistical certificates. >> reporter: while states compete with incentives for businesses to locate their operation, ohio is often the top choice for retailers of late. the state now hosts nearly 800 warehouse and storage establishments. double those in tennessee. those still fewer than pennsylvania. two other states considered ideal for distribution. ohio is a less expensive option. the major interstates rail lines and air cargo hubs make it less expensive to move goods into and out of state quickly. some private equity investors estimate tax incentive and cheaper plan can save a retailer
as much as 20% in operating costs. retail consultant also says an added benefit is a collegialiaty of ohio's network. i'm courtney reagan. the drugstore is blaming a slow flu season for weak demand for cold medicine. ploft ro profit rose. the company raised yearly guidance on earnings. that wasn't enough. walgreens shares fell more than 3%. some positive news for valeant. the company says it will not have to restate financial statements and no outstanding issues were found in the accounting practices. the company says it expects to release its 2015 financial
report by april 29th. shares rose fall 10% to 2873. ceo and president have been ousted. this after an internal investigation revealed ethical issues within the company's management. the co-founders are expected to maintain their seats on the company's board of directors. shares were up 13% to 1088. the justice department will file a lawsuit this week to stop the proposed merger between oil service providers halliburton and baker hughes. they say it will violate anti-trust laws. a surprise departure at disney. the company's chief operator officer says he's leaving the company. the move has disney share how old -- shareholders concerned.
julia has more on the big question mark now hanging over one of the most well known and widely held companies. >> he's stepping down from his position in may shocking hollywood insiders and disney investo investors. >> i thought he was doing a fantastic job as he's done many aspects of management, a smooth transition. highly qualified, very popular, very smart, great candidate. >> when he was appointed coo last february, he seemed perfectly position to take over when his contract expired in june 2018. he was cfo for a dozen years and well liked by wall street and investors and ran the parks and resorts division for five years and laying the ground work for the launch of disney shanghai in june.
what happened? a source close says disney's board wasn't assure to him he would be the successor in two years. the board wanting to explore other options, it didn't make sense to stay. >> it's surprising and a little mystifying. tom's been a senior executive at disney for two decades. one would have thought that he was pretty known quantity and they evaluated him. seems like the board made a difference decision. >> now the board is making an executive search a to priority saying it will broaden the scope of the planning process to identify and evaluate a robust slate of candidates for consideration. a source saying disney is focused on looking for candidates outside the company and it's far too soon for any speculation to be meaningful. while disney says he intends to step down when his contracts expires, it's possible he could
extend the contract again. twitter has bought the rights to live stream ten thursday night nfl games as their air on nbc and cbs beating out amazon and verizon. they will stream the game through its app without requiring users to sign up. video host with any sports news web site joins us to explain what this means for twitter and our viewers. welcome. nice to have you here. >> what do you make of this deal with twitter? >> in the simplest terms possible i'd say it's a win win in that twitter, which has struggled on the business side gets this great package in the nfl and the nfl gets the best social media platform for responding to live events. >> they really had a hard time
growing their users base. that's been disappointing to wall street and surprising. does this help them achieve that? >> i think so. the way that twitter is going to air the games, you don't have to be a user to watch the thursday night game. you can go and i'm guessing how they will air that, you'll have the opportunity to sign up and make an account and talk with all the other people in sports media who are complaining about the thursday night quality of the games. >> you know they got this deal for a bargain when you compare what yahoo paid to stream one game last year, which was 20 million. twitter got ten games for ten million. does any of that have to do with anthony noto who is the cfo at twitter but was the cfo at the nfl? >> there's a relationship between twitter and the nfl. last year they game to an agreement about giving them the right to air certain nfl highlights.
twitter will be streaming the nbc or cbs feed. they will not have the same advertising opportunities. yahoo was responsible for the broadcast and the advertising opportunities that came with that. >> what does it mean for the nfl? >> i think this just one more opportunity for the nfl to make sure that it is in every american's face every day of the year despite there only being 16 regular season games a year. it's a 365-day news cycle with them. >> how much does it have to do with international reach? >> that's a good point. i think last year game was streamed on yahoo, 33% of the streams came from international users. i think twitter is the live social media platform whether it's arab spring or the oscars or the super bowl. this is something the world can use to react to a live event. >> thanks so much. appreciate it. >> thank you. coming up, they may sound
strange but some odd ball deductions may help you lower your tax bill. come tax season, everyone wants to know how the make the most of every deduction so they can lower that tax bill. we did some digging or sharon did, and found a few very strange but very legal federal deductio deductions. sharon epperson joins us now. >> a lot of people are taking classes to reinvent themselves
in their career to stay fresh with job skills, graphic design, maybe learning another language. you could get a $2,000 credit your taxes for taking the classes, a lifetime learning credit. that's something to consider. >> absolutely. >> for common core math. >> i'll get to the kids in a minute. pet moving expenses. when you move and relocate you're changing jobs and moving out of state. you need get your pets there. you can deduct the moving expenses for your cat, dog, cat. that's something a lot of people do not consider. another is smoking cessation programs. the one about kids that we know but we know a will tlot of our s don't no is summer camp. you can take a child dependent care. make sure you keep the records. >> you have to keep the records.
that could cover, if it's not sleep away camp but a day camp. >> it's only for day camp. it can cover a will the of costs. some of these day camps are expensive as well. >> do people, what kind of documentation do you have to have with some of this stuff? >> i want to get to that. i have to tell you some crazy ones that people don't know, which is gambling losses. you can usual -- you have to claim the income on the winnings but if you have losses, that can offset that. the other one that's crazy to people is a swimming pool in your house that you might need for medical treatment. there's been case where someone has been able to deduct that expense. the guard dog for your home business. all of this still requires documentation. it requires keeping really good records, having the documentation in hand before you file not because you have to submit it with your return wu you want to make sure you have all those records. we know we have done that.
>> it probably wouldn't hurt to submit it with the returns. with the actual return, you don't necessarily have to. you need to keep that on hand. you don't want to get audited but you want to be ready in case it happens. you want to look at all this to see whether itemizing or taking the standard deduction is best for you. look at the expenses. >> i don't know how long it took you to find those things the but thank you. appreciate it. all right. that does it for "nightly business report." thanks for joining us. i'm sue herera.
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